The Tragic Mistakes of the Economic Theory Still Being Taught in Universities

15 Pages Posted: 3 Apr 2019 Last revised: 23 Jul 2021

See all articles by Dimitrios Nomidis

Dimitrios Nomidis

Athens University of Economics and Business; National Technical University of Athens

Date Written: March 30, 2019

Abstract

Conventional microeconomic theory, founded and developed mainly by the neoclassical economists, contains some fundamental mistakes that lead economic theory to erroneous conclusions about how the economy operates and the results of this operation. Unfortunately, those mistakes have still remained after the neoclassical synthesis that came through the merger of Neoclassical and Keynesian economics (mainstream economics) and they are still taught in universities to this day. The correction of those mistakes brings about dramatic changes in the economic theory concerning price theory, perfect competition, income distribution, social welfare, and other major fields of economics. Below a brief analysis of those mistakes and an attempt to detect their probable causes is made. Also, a brief account of the dramatic changes brought about by the correction of these mistakes in the economic theory with their social and political implications is presented.

Keywords: mistakes of the neoclassical theory, price taking, individual demand curves for the firms, profit maximization, supply curve, price determination, equilibrium at firm and at market level, monopolistic nature of perfect competition, social welfare

JEL Classification: B13, B21, D21, D33, D41, D42, D43, D46, D60

Suggested Citation

Nomidis, Dimitrios, The Tragic Mistakes of the Economic Theory Still Being Taught in Universities (March 30, 2019). Available at SSRN: https://ssrn.com/abstract=3362956 or http://dx.doi.org/10.2139/ssrn.3362956

Dimitrios Nomidis (Contact Author)

Athens University of Economics and Business ( email )

76 Patission Street
Athens, 104 34
Greece

National Technical University of Athens ( email )

Zografou Campus
Athens
Greece

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